Lithium royalty seeks to buy rival to gain Argentina stake

Canada’s Lithium Royalty Corp. offered to buy rival TNR Gold Corp. for C$15 million ($11 million) in a bid to get a cut of revenues from an Argentina lithium project.  

Lithium Royalty made an unsolicited offer to acquire TNR Gold for eight Canadian cents per share after “seeking to engage” with the company since mid-July to discuss a possible deal, the mine financing firm said Friday in a statement. The offer is a 45 percent premium to closing share price on Thursday.

TNR Gold’s stock surged as much as 27 percent to seven cents a share in Toronto, while Lithium Royalty gained as much as 4.6 percent.

Lithium Royalty’s move is part of a rapid expansion since the Toronto-based firm went public in March. Buying Vancouver-based TNR Gold would give it ownership of a royalty on an Argentine lithium project operated by China’s Ganfeng Lithium Co.

Royalty and streaming firms have taken on greater roles in project financing as mine builders seek alternative sources of capital for expensive projects. The companies mostly pay cash to miners in exchange for a cut of future revenue on metals output at a discounted price.